Shares drop in Mike Ashley’s Sports Direct

Shares in Sports Direct, Britain’s biggest sportswear retailer — which late last year agreed to buy retailer Heatons here — fell almost 6% yesterday after its founder said the company’s profits would fall this year.

Shares drop in Mike Ashley’s Sports Direct

Mike Ashley, who is deputy chairman of Sports Direct and holds 55% of its equity and who also owns Newcastle United, told The Times: “We are in trouble, we are not trading very well. We can’t make the same profit we made last year.”

Sports Direct made core earnings of £383.2m (€490.4m) in the year to April 26, 2015.

Its latest forecast for the 2015-16 year was issued in January when it said it was no longer confident of meeting its core earnings target of £420m, guiding to a range of £380m to £420m.

“You might have expected an announcement from Sports Direct revising down their profit guidance, but no such announcement has yet been forthcoming,” said retail analyst Nick Bubb.

Shares in the firm have fallen 38% over the last year and earlier this month lost their place in Britain’s FTSE 100 index of blue chip companies. The company was worth £2.43bn yesterday.

Sports Direct has been under fire from media, investors, and politicians over its work practices. Mr Ashley earlier this week said he would refuse to face British lawmakers in parliament to answer questions about the treatment of workers.

He has also expressed regrets about getting into football but has affirmed that he has no interest in selling Newcastle United. He has said he will not quit even if they are relegated from the Premier League. Relegation from the Premier League could cost clubs up to £100m.

“I’ve got no choice,” said Mr Ashley. “I am wedded to Newcastle like Sports Direct. They’ve got me and I’ve got them. That’s just the way it is.”

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